Nasdaq drops 5.5% as investors reassess the AI boom

The Nasdaq 100 fell 5.5% in a week amid doubts over the returns on nearly $1tn of AI spending, after Australian datacentre firm Firmus failed to list on the ASX. Analysts call it a valuation reset rather than the end of the boom, while flagging hyperscalers' growing debt load.

• Nasdaq 100 fell 5.5% but is still nearly three times its early-2023 level
• Hyperscalers are set to spend $800bn on AI infrastructure this year, up from $425bn in 2025
• Their bonds now make up nearly 10% of the global investment-grade market, up from 0.5%
• The Magnificent Seven account for 35% of the S&P 500, up from 12% a decade ago